State with reasons whether you agree or disagree with the following statement (any three): Large number of buyers and sellers is the only feature of perfect competition.

Answer: I disagree with the statement.

Reasons:

1. Large number of buyers and sellers: This is one feature; no single buyer or seller can influence price, so the firm is a price taker.
2. Homogeneous product: All firms sell identical products, so the same price prevails.
3. Free entry and exit: Firms can enter or leave the industry freely in the long run.
4. Perfect knowledge: Buyers and sellers have full knowledge of market conditions.
5. Perfect mobility of factors: Factors of production move freely between industries.
6. Single price and no transport cost: One uniform price prevails throughout the market.

Thus a large number of buyers and sellers is only one of several features of perfect competition.